Diabetic Nephropathy (DN) remains an unmet medical challenge as its prevalence is projected to continue to increase and specific medicines for treatment remain undeveloped. Activation of the immune system, in particular T-cells, is emerging as a possible mechanism underlying DN disease progression in humans and animal models. We hypothesized that inhibition of T-cell activation will ameliorate DN. Interaction of B7-1 (CD80) on the surface of antigen presenting cells with its binding partners, CTLA4 (CD152) and CD28 on T-cells, is essential for T-cell activation. In this study we used the soluble CTLA4-Fc fusion protein Abatacept to block cell surface B7-1, preventing the cellular interaction and inhibiting T-cell activation. When Abatacept was dosed in an animal model of diabetes-induced albuminuria, it reduced albuminuria in both prevention and intervention modes. The number of T-cells infiltrating the kidneys of DN animals correlated with the degree of albuminuria and treatment with Abatacept reduced the number of renal T-cells. As B7-1 induction has been recently proposed to underlie podocyte damage in DN, Abatacept could be efficacious in DN by protecting podocytes. However, this does not appear to be the case as B7-1 was not expressed in: 1) kidneys of DN animals; 2) stimulated human podocytes in culture; or 3) glomeruli of DN patients. We conclude that Abatacept ameliorates DN by blocking systemic T-cell activation and not by interacting with podocytes.